IRS 6330c: Issues Raised at a Due Process Hearing

The Collection Due Process (CDP) hearing is a formal proceeding that provides taxpayers with an opportunity to contest an intended collection action by the Internal Revenue Service (IRS). Established under Internal Revenue Code Sections 6320 and 6330, this process allows for a review of a proposed levy or the filing of a Notice of Federal Tax Lien. The hearing is conducted by the IRS Independent Office of Appeals, which ensures an impartial officer who has had no prior involvement with the case will consider the taxpayer’s arguments.

Requesting a Collection Due Process Hearing

The right to a CDP hearing is triggered by specific IRS notices. Typically, a taxpayer receives a “Final Notice of Intent to Levy and Notice of Your Right to a Hearing,” which communicates the IRS’s plan to seize assets. Upon receipt of this or a similar notice, such as a “Notice of Federal Tax Lien Filing,” a formal request must be submitted to the IRS to secure a hearing.

This request is made using Form 12153, Request for a Collection Due Process or Equivalent Hearing. This document requires the taxpayer to provide their identifying information, the tax years or periods in question, and a brief explanation for their disagreement with the collection action.

The completed Form 12153 must be sent to the address shown on the levy or lien notice within 30 days of the date printed on the notice. Missing this 30-day window results in forfeiting the right to a standard CDP hearing, though a less powerful “equivalent hearing” may still be requested for up to one year.

Issues Raised at the Hearing

During a CDP hearing, a taxpayer can raise several specific issues with the IRS Independent Office of Appeals. A common topic is proposing collection alternatives to a levy. These can include negotiating an installment agreement, submitting an offer in compromise to settle the debt for less, or requesting to be placed in currently not collectible status due to financial hardship.

A taxpayer may also use the hearing to raise certain spousal defenses. This includes requesting innocent spouse relief, where one spouse seeks to be relieved of responsibility for tax liabilities resulting from the other spouse’s errors or omissions on a joint tax return.

The hearing also provides a venue to question whether the IRS followed all required legal and administrative protocols. This involves verifying that the IRS met all procedural requirements before issuing the lien or levy notice. If any procedural errors are identified, the collection action may be deemed invalid.

A taxpayer can challenge the existence or amount of the underlying tax liability, but only under specific circumstances. This argument is permissible only if the taxpayer did not receive a statutory notice of deficiency or otherwise have a previous opportunity to dispute the tax amount. If a prior chance to contest the liability existed, such as through an audit, the issue cannot be revisited in the CDP hearing.

The Hearing Outcome and Next Steps

Following the conclusion of the CDP hearing, the IRS Independent Office of Appeals will formally issue its findings in a document called a Notice of Determination. This notice details the decisions made by the Appeals Officer regarding the issues raised by the taxpayer. It will state whether the proposed collection action is sustained and provide the legal and factual reasoning for the conclusion.

If the taxpayer disagrees with the Notice of Determination, they have the right to challenge the decision by filing a petition with the U.S. Tax Court. This legal action must be initiated within 30 days from the date of the Notice of Determination.